Minn. settles lawsuit with debt collection company

A company that buys bad debts has agreed to change its collection practices to settle a lawsuit filed by the state of Minnesota that accused it of filing unreliable court papers and carelessly targeting people for debts they didn't owe.

Attorney General Lori Swanson announced the settlement Wednesday with Midland Funding one of the largest debt buyers in the country. The company has filed over 15,000 lawsuits against individuals in Minnesota courts. Her office accused the company of "robo-signing."

Under a "consent judgment" signed by a Hennepin County judge, Midland agreed to verify its information before attempting to collect on debts and to give people the chance to dispute illegitimate demands for payment. Midland also agreed to pay the state $500,000.

The company didn't immediately respond to requests for comment.

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